In a rare joint display of alarm, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the BKMEA have formally challenged the interim government's move to suspend duty-free yarn imports. At a press conference in Dhaka on January 19, 2026, industry heads described the decision as a ‘death warrant’ for the Ready-Made Garment (RMG) sector, which accounts for 84 per cent of national export earnings. The policy shift, which could push effective tax burdens on imported yarn as high as 40 per cent, comes as the sector faces a ‘perfect storm’ of challenges. Between July and December 2025, apparel exports already contracted by 2.63 per cent, with a staggering 14.23 per cent plunge in December alone. The garment sector is now in the ICU, warned Mohammad Hatem, President, BKMEA noting, domestic spinning mills are currently charging a premium of $0.40 to $0.60 per kilogram over international prices.
WTO compliance and competitive erosion
The trade bodies contend that the imposition of these duties violates the World Trade Organization’s (WTO) Safeguard Agreement, which mandates a transparent investigation to prove ‘serious injury’ to domestic industry before protective tariffs are applied. For Bangladesh’s $27 billion knitwear segment, the stakes are existential. Exporters argue, local spinning mills lack the capacity to supply the specialized high-count yarns required for the premium market shift planned for 2026. This cost escalation threatens to drive international buyers toward competitors like Vietnam, which recently secured zero-duty access to major global markets via its latest Free Trade Agreements. Rather than import barriers, apparel leaders are urging the government to stabilize the primary textile sector through direct cash incentives and a reliable energy supply to prevent a total supply chain collapse.
The BGMEA and BKMEA are the apex trade bodies representing Bangladesh’s multi-billion dollar apparel sector. They manage global buyer relations and labor compliance for thousands of factories. Following a 14 per cent export dip in late 2025, their 2026 strategy focuses on LDC graduation readiness and diversifying into high-value technical textiles and non-traditional markets like Australia and the UAE.
